Tax Book 2023

Chapter 07 Solved Past Papers Sales Tax Numericals of CA Mod- C

Rupees

2,500,000

875,000

625,000

SammajAssociates(SA)isregisteredundertheSalesTax 1990 andisengagedinthebusinessofmanufacturing,tradingand
exportofelectronic,chemicalandotherconsumergoods,FollowinginformationhasbeenextractedfromSA’srecordsforthemonth
of August 2022:

Supplies:

To registered persons

To un-registered persons

To person registered as exporter

September 2016 Q. NO. 5

Conceptual Approach to Taxes___ _951

875,000

625,000

930,000

725,000

510,000

360,000

472,000

Following transactions pertaining to August 2020 are not included in the above table:

Finished goods from un-registered persons

Packing material from registered persons

Local machinery from un-registered person

Import-finished goods

PackingmaterialfromregisteredpersonsincludematerialworthRs.150,000whichwasusedforpackingelectricmotors.On 31
August 2022 these motors were still part of SA’s unsold stock.

(i)    Sales tax of Rs. 70,000, Rs. 45,000 and Rs. 68,000 was paid in cash on electricity, gas and telephone bills 

respectively.

(ii)   SApurchasedhighqualitycablesandwiresworthRs.250,000fromaregisteredsupplierfortheinstallationoflocal

To un-registered persons

To person registered as exporter

Purchases:

Raw material from registered persons

Other related information is as under:
(i)   On 10 February 2022 SApurchasedliquidnitrogenworthRs.300,000fromMughalChemical(MC),aregistered
supplier,oncredit.On 15 August 2022 SapaidtheoutstandingamounttoMCbywayofacrossedchequedrawnonSA’s
bank account.
(ii)  InApril 2022 SAinadvertentlychargedsalestaxofRs.58,000insteadof85,000onsupplyofchemicalstooneofits

(v)  On 5 August 2022 SareceivedadvanceofRs.600,000againstsupplyofelectricshaversofBariElectronics.SA

agreed to deliver the goods in September 2022.

(vi)   On 25 August 2022 SAissueddiscountcouponsworthRs.450,000itscustomersforparticipatingingrandannual

sales exhibition to be held in December 2021.

(ii)   SApurchasedhighqualitycablesandwiresworthRs.250,000fromaregisteredsupplierfortheinstallationoflocal

machinery purchased from un-registered suppliers.

(iii)   Threecartonsofimportedshampoo,fallingunderthirdschedule,weresuppliedtoun-registereddistributorsata

priceofRs.11,000percarton.ThedistributorsnormallysupplysuchshampootoretailersatapriceofRs.135,000per

carton.

(iv)  FiveelectrickettlesworthRs.75,000werepurchasedforuseintheofficesoffactorymanagerandfirstline-

supervisors of production workers.

Required:

(ii)  InApril 2022 SAinadvertentlychargedsalestaxofRs.58,000insteadof85,000onsupplyofchemicalstooneofits
registeredcustomers.Sofar,SAhasnotobtainedpermissionfromthecommissionerInlandRevenueforrevisionof
return.
(iii)   InJuly 2022 SAclaimedInputtaxofRs.80,000onpurchaseofhydrochloricacidfromJBTraders.Thesupplierhas
not yet deposited the amount of sales tax collected from SA in Government treasury.
InJuly 2022 theexcessofinputtaxoveroutputtaxamountedtoRs.20,000.Whereas,unadjustedinputtaxinexcessof90%of
output tax amounted of Rs 10,000.
All the above figures are exclusive of sales tax, wherever applicable, Sales tax is payable at the rate of 17%

UndertheprovisionsoftheSalesTaxAct, 1990 andRulesmadethereunder,computetheamountofsalestaxpayablebyor
refundable to SA and the amount of sales tax to be carried forward, if any, for the tax period August 2022.

Conceptual Approach to Taxes___ _951